Academic journal article Energy Law Journal

Report of the Electricity Regulation Committee

Academic journal article Energy Law Journal

Report of the Electricity Regulation Committee

Article excerpt

This report covers significant electric regulatory orders issued by the Federal Energy Regulatory Commission (FERC or the Commission) in 2014.* This report does not, however, address transmission reliability, demand-side management/renewable energy, FERC enforcement matters, or appellate decisions.

I. RULEMAKINGS AND POLICY STATEMENTS

A. Coordination of the Scheduling Process of Interstate Natural Gas Pipelines and Public Utilities, 146 F.E.R.C. ¶ 61,201 (2014)

On March 20, 2014, the FERC issued a Notice of Proposed Rulemaking to revise its regulations to better coordinate the scheduling of natural gas and electricity markets, in light of increased reliance on natural gas for electric generation, and to provide additional flexibility to all shippers on interstate natural gas pipelines.1 The FERC's proposal focuses on the scheduling practices of the natural gas transportation and electricity markets. In particular, the proposed rule would (1) start the natural gas operating day earlier "to ensure that gas-fired generators are not running short on gas supplies during the morning electric ramp periods;" (2) "[s]tart the first day-ahead gas nomination opportunity . . . for pipeline scheduling later than the current [start time] . . . to allow electric utilities to finalize their scheduling before gas-fired generators must make gas purchase arrangements and submit nomination requests for natural gas transportation service to the pipelines;" and (3) "[m]odify the current intraday nomination timeline to provide four intraday nomination cycles, instead of the existing two, to provide greater flexibility to all pipeline shippers."2 The FERC also clarified its policy on the ability of a pipeline to permit firm shippers to bump an interruptible shipper's nomination during any enhanced nomination opportunity.3 In addition, the FERC "propose[d] to require all interstate pipelines to offer multiparty services agreements" that can provide "multiple shippers the flexibility to share interstate pipeline capacity to serve complementary needs."4 The FERC provided the natural gas and electric industries, through the North American Energy Standards Board, 180 days "to reach consensus on any revisions to the . . . proposed rule" and either file consensus standards or notify the FERC that a consensus could not be reached.5

B. Refinements to Policies and Procedures for Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, 147 F.E.R.C. ¶ 61,232 (2014)

On June 19, 2014, the FERC issued a Notice of Proposed Rulemaking to revise its policies, set forth in Order No. 697, for evaluating applications to sell energy, capacity, and related services at market-based rates (MBR).6 The FERC stated that its proposed revisions were intended "to streamline and simplify the [MBR] program, and to enhance and improve the program's processes and procedures."7 The proposals included new exemptions from the FERC's horizontal market power screen requirements and clarifications designed to bring the MBR program up to date with best practices.8

The FERC proposal no longer required applicants and sellers in markets operated by a regional transmission organization (RTO) or an independent system operator (ISO) to submit indicative horizontal market power screens: the pivotal supplier analysis and the wholesale market share analysis.9 The FERC noted that its practice had been to grant exceptions to sellers in RTO markets that failed the screens and that the proposed exemption from filing the indicative screens is, therefore, intended to "modify the approach taken in Order No. 697 to reflect current practice and reduce the burden on these sellers."10

The FERC also proposed an exception "where all generation capacity owned or controlled by a seller and its affiliates in the relevant balancing authority areas (including first-tier balancing authority areas or markets) is fully committed. …

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